1. Field of the Invention
The invention relates to the field of electronic transactions, and more particularly to techniques for rapidly updating credit scores or other credit information, for instance on a daily or greater basis.
2. Description of the Related Art
The credit card, mortgage, personal credit and other financial sectors rely on a variety of information in reviewing, approving, denying and otherwise evaluating credit and credit risk.
One commercially known metric for assessing credit risk is the mathematical model generated by Fair, Issac and Company (FICO) which assigns consumers a normative score based on credit files and other information. Credit files themselves, such as those maintained by the credit reporting organizations (such as Equifax and Experian), may receive updated account payment, balance, delinquency and other information on a periodic basis, which is typically monthly. The First Data Resources Corporation (FDR) likewise commercially handles score calculation generally on a monthly basis. One known FDR risk score is based on historical data of a particular credit card account, including daily transaction data for the account. However, the FDR risk score is not based on credit reporting organization data.
Other methods and systems are known which generate credit scores on a monthly basis using bimonthly data from credit reporting organizations and monthly historical data for a particular account.
Financial institutions such as credit card issuers use the credit scores and data to determine whether and to what extent to extend credit to a consumer. Credit card issuers may rely on automated scoring engines which use the credit scores and data to determine to what extent to extend credit to an existing cardholder. In a certain percentage of cases, the credit card issuer, based on the scoring engine, will extend credit to a consumer who then fails to repay the loan. The profit of a credit card issuer is thus affected by the predictive capability of the scoring engine. A scoring engine which reduces the instances of default by even a small percentage can have a significant effect on the profit of the credit card issuer.